2001 SALES AND USE TAX LAW CHANGES

Transcription

1 MINNESOTA Department of Revenue 2001 SALES AND USE TAX LAW CHANGES August 2001 CONTENTS Administrative 1-2 Telecommunications 2 Exemptions 3 & 5 Streamlined Sales Tax Project 4-5 Construction Projects 6 Business Ed Schedule 7 Motor Vehicles 8 Miscellaneous Tax Laws 8 For sales and use tax information contact: Minnesota Department of Revenue, Corporate and Sales Tax Division, Mail Station 6330, St. Paul, MN Phone: Twin Cities or toll free For TTY, contact Minnesota Relay at (ask for ). Internet: Printed on recycled paper with 10 percent post-consumer waste using soy-based ink. Stock No Our new electronic filing and paying system, e-file Minnesota, replaced the paper-based filing system with Internet and telephone filing in July Paper returns are no longer available for filing sales and use tax returns. ADMINISTRATIVE MANDATED ELECTRONIC PAYERS Filers with an annual sales and use tax liability of $120,000 or more are required to pay their sales and use tax electronically. The following law changes apply to mandated electronic payers: Repeal of June accelerated payment The June accelerated payment for 2002 is reduced from 75 to 62 percent of the actual June liability. The requirement to make a June accelerated payment is repealed after the June 2002 sales tax return. Payment and filing due dates Beginning for payments due in July 2001, the due date for filing returns and making payments for sales and use tax returns is changed from the 14 th to the 20 th of the month following the end of the reporting period. This applies to all payments and returns except for the June 2002 return. The June 2002 accelerated payment will be due June 26, 2002 and the remaining payment and return for June will be due August 20, ELECTRONIC POSTMARK Electronic filings and payments for tax returns will be considered timely if the time and date stamp confirming the transaction authorizing the electronic payment or filing is on or before the due date. In the past, electronic payments had to be initiated before the due date so that the payment was received by the Department of Revenue on the due date. This does not apply to transactions where a taxpayer sets the electronic transfer payment date later than the due date. ALL-TERRAIN VEHICLES (ATV S) Beginning July 1, 2001, persons applying to register an ATV with the Department of Natural Streamlined Sales Tax Project see pages 4-5 In addition to filing returns, e-file Minnesota accepts payments electronically. This allows you to file your return early and schedule your payment to be withdrawn on the due date. However, you can still choose to remit your payment using a check. On the Internet, go to and follow the link to e-file Minnesota. You can file by phone by calling Resources are required to show proof that sales tax was paid, or that the purchase is exempt from sales tax. If tax is due, it will be collected at the time the ATV is registered. This applies only to the first time an ATV is registered in Minnesota. Used ATV s are subject to sales tax when purchased from a dealer or person that regularly sells them. However, a purchase from a private party is exempt from Minnesota sales or use tax. SALES AND USE TAX RECODIFICATION The legislature passed a bill last year recodifying the sales and use tax law effective July 1, The recodification clarifies the sales and use tax law and restructures the chapter so it is easier to read and locate information. Over the past year legislative staff held meetings to allow for public input on technical issues. As a result of those meetings, corrections and changes were made to ensure that the meaning of the original statute is not changed. Paper copies of the sales and use tax statutes will be available later this year. To order a copy, please call the Minnesota Bookstore at , or REVOCATION OF SALES TAX PERMITS Beginning August 1, 2001, sales and use tax permits can be revoked for violation of the cigarette and tobacco product laws. A permit may be revoked if the retailer buys 100 cartons of cigarettes or $500 of tobacco products from an unlicensed seller for resale. Continued on page 2

2 ADMINISTRATIVE continued from page 1 Current law allows the department to issue a new sales and use tax permit or reinstate a revoked permit if the taxpayer provides reasonable evidence of intention to comply with the sales and use tax laws and rules. The law is amended, effective July 1, 2001, to clarify that if these requirements are not met, the permit may be cancelled with proper notification to the permit holder. STORAGE DEFINITION The definition of storage in the sales tax law conflicts with language relating to goods that are brought into Minnesota and stored for later use in a trade or business outside of Minnesota. The law is amended to clarify that goods brought into Minnesota for later use outside of Minnesota are taxable unless the goods are for resale or qualify for another exemption. This provision is effective for storage, use, or consumption beginning July 1, However, no tax will be imposed on tangible personal property stored in Minnesota between July 1, 1997 and June 30, 2001 if the taxpayer relied on the language in the definition of storage. No refund of sales or use tax paid will be allowed unless a valid exemption applies. AIRCRAFT REGISTRATION The Commissioners of Revenue and Transportation may enter into an agreement allowing the Department of Transportation to act as an agent for Revenue to collect the sales tax on aircraft at the time of registration or licensing. Effective July 1, FRIVOLOUS RETURN PENALTY The $500 penalty, previously limited to individual income tax returns, now applies to all taxes covered by chapter 289A. The penalty can be assessed when a taxpayer files a return or a claim for refund without sufficient information to determine if it is correct, or if the document contains information that is substantially incorrect due to a frivolous position or a desire to delay or impede the administration of Minnesota tax laws. Effective for returns or claims for refund filed on or after July 1, DELINQUENT TAXPAYER LIST A new program is being tested where names of delinquent taxpayers may be published. In addition to various other procedural guidelines and restrictions, the taxpayer must be provided with details of the liability and intent to publish by certified mail at least 30 days prior to publication. This program begins July 1, 2001 and is scheduled to end on June 30, TELECOMMUNICATIONS Changes in the tax law affect how sales and use tax applies to telecommunications services effective August 1, Telecommunications services, cable television services, direct satellite services and private communication services are now specifically defined in statute. As a result of these new definitions, certain telecommunications services that previously were exempt are now subject to sales tax. New taxable services include interstate and international calls that originate in Minnesota and terminate outside Minnesota, and calls that originate outside Minnesota and terminate in Minnesota if the service is charged to a telephone number or customer located in Minnesota. Mobile telecommunications services are defined and taxed based on the Mobile Telecommunications Sourcing Act, United States Code, title 4, sections 116 to 126. Under this act, mobile telecommunications services are subject to tax based upon the customer s place of primary use. Place of primary use is defined as the residential street address or the primary business street address of the customer. In order to implement the law changes relating to telecommunication services, the department will administratively allow a transitional period. Sales tax does not apply to charges for the new taxable services if the customer s bill includes charges for these services for any date prior to August 1, 2001, unless the billing period extends past September 30, If the billing period includes new taxable services both before August 1 and after September 30, 2001, sales tax applies to services after August 1. Telecommunications services definitions: Telecommunications services means the transmission, conveyance, or routing of voice, data, audio, video, or any other information or signals using electronic, satellite, optical, microwave, or any other medium or method. Telecommunications services includes furnishing access to telephone service by a hotel to its guests, but does not include services purchased with a prepaid telephone calling card, private communication service purchased for the state lottery, information services, and telecommunications purchased for resale in the normal course of business. Information services as used here means charges for offering the capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information. Cable television service means the transmission of video, audio, or other programming services and includes point-to-multipoint distribution services transmitted or broadcast directly to the subscriber s premises. The term includes basic, extended, premium, pay-per-view, digital, and music services. Direct satellite services means programming transmitted or broadcast by satellite directly to the subscriber. Private communication service means the exclusive or priority use of any communication channel or group of channels that may be connected by switching and the switching capacity or other associated services. Services that carry traffic over the Internet are also included. 2

3 EXEMPTIONS TELECOMMUNICATIONS MACHINERY AND EQUIPMENT for use directly by a telecommunications service provider primarily to provide telecommunications services for sale at retail are exempt beginning August 1, This exemption includes machinery, equipment, fixtures, and attachments and repair and replacement parts for qualifying equipment. The exemption does not include wire, cable, fiber, poles, or conduit used in transporting telecommunications services. Equipment used for support operations, administrative activities, or other functions that are not directly used in providing the telecommunication services do not qualify for the exemption. For example, computers and software used for customer billing or accounting purposes cannot be purchased exempt. For more information on the specifics of this exemption, please contact our office. To claim exemption the purchaser must provide a completed copy of the Certificate of Exemption, Form ST-3, to the supplier. Write Other in the exemption code box and indicate that the items purchased qualify for the telecommunications services equipment exemption in the space provided under Describe the merchandise for which you are claiming exemption. The certificate will be updated in the near future to include the exemption for telecommunications machinery and equipment. AMBULANCE SERVICES licensed by the Department of Health under section 144E.10 may purchase supplies and equipment used to provide medical care and repair and replacement parts for ambulances and petroleum products exempt from sales tax. Previous law did not allow an exemption for petroleum products used by ambulance services. The exemption for other items was limited to ambulance services owned and operated by nonprofit organizations or political subdivisions of the state. Effective August 1, FARM MACHINERY EXEMPTION has been expanded to include stationary feed bunks and machinery used in the production of plants. To qualify for the exemption the machinery must be used directly and principally in the production for sale, but not including the processing of, livestock, dairy animals, dairy products, poultry and poultry products, fruits, vegetables, trees and shrubs, plants, forage, grains, and bees and apiary products. Effective August 1, ENERGY EFFICIENT PRODUCTS. An exemption is allowed for sales or purchases of the following energy efficient products beginning August 1, 2001 and ending July 31, 2005: Residential lighting fixtures and compact florescent bulbs that have an energy star label indicating that the product meets the United States Environmental Protection Agency and the United States Department of Energy criteria for energy efficiency. Electric heat pump hot water heaters with an energy factor of at least 1.9, natural gas water heaters with an energy factor of at least 0.62, and natural gas furnaces with an annual fuel utilization efficiency greater than 92 percent. To qualify, products must have an energyguide label from the manufacturer that indicates that the product meets the standards listed for each product. Photovoltaic devices are exempt. A photovoltaic device is a solid-state electrical device, such as a solar module, that converts light into electricity. METROPOLITAN COUNCIL. Beginning August 1, 2001, the Metropolitan Council may purchase vehicles and repair parts for those vehicles used to equip light rail transit operations exempt from sales tax. WASTE PROCESSING EQUIPMENT. The exemption for waste processing equipment used by resource recovery facilities to process solid or hazardous waste is expanded to include an electric generation facility that processes and utilizes waste tires as its primary fuel. Effective July 1, ADMISSIONS TO THE MINNESOTA ZOOLOGICAL GARDEN are exempt beginning August 1, This exemption does not apply to tickets or admissions to performances or events unless they are sponsored and conducted exclusively by the Minnesota Zoological Board or employees of the Minnesota Zoological Garden. NONPROFIT ADMISSION TICKET EXEMPTION. The exemption for sales of admissions to events sponsored by certain nonprofit organizations is amended. To qualify for the exemption, the sales must be made by an organization that qualifies as a nonprofit organization under 501(c)(3) of the Internal Revenue Code and that meets specific voluntary contribution criteria, or by a municipal board that promotes cultural and arts activities. In order for 501(c)(3) organizations to qualify, their annual receipts from voluntary contributions must be at least: three percent for the organization s fiscal years ended in calendar years 2000 and 2001, for sales made between August 1, 2001 and June 30, 2003; four percent for the organization s fiscal year ended in calendar year 2002, for sales made between July 1, 2003 and June 30, 2004; and five percent for the organization s fiscal year ended in the preceding calendar year for sales made after June 30, The exemption only applies if the entire proceeds from the event are recorded on the books of one or more qualifying organizations and, after reasonable expenses, the proceeds are used solely to provide opportunities for citizens of the state to participate in the creation, performance, or appreciation of the arts. This is effective August 1, 2001, but does not apply to tickets or admissions sold prior to August 1, 2001 for events that occur after July 31, Continued on page 5 3

4 STREAMLINED SALES TAX Legislation was passed adopting the Uniform Sales and Use Tax Administration Act proposed by the multistate Streamlined Sales Tax Project (SSTP). The goal of the SSTP is to design a system that reduces the costs and burden of sales tax compliance for participating sellers by simplifying sales and use tax laws and administrative practices. The system will use a technology-oriented business model for sales tax administration and requires states to assume responsibility for the costs of the system. The act allows Minnesota to enter into the Streamlined Sales and Use Tax Agreement that sets out uniform definitions for administration of the sales and use tax law. Minnesota has adopted those definitions necessary to bring our law into conformance with the agreement. Brief summaries of the changes and how they impact Minnesota law are provided below. All of these changes are effective for sales and purchases made on or after January 1, Over the next few months we will be updating the sales tax fact sheets to reflect these law changes. SALES PRICE The definition of sales price is amended to conform with the required uniform definitions under the SSTP. This definition determines what charges that are a part of a sale or lease are taxable. Effective January 1, 2002, the taxable sales price includes the total consideration without deduction for the cost of property sold, materials used, labor or service cost, interest, losses, costs of transportation to the seller, taxes imposed on the seller, and any other expenses of the seller, charges for services necessary to complete the sale, delivery charges, installation charges, and the value of exempt property given to the purchaser when taxable and exempt personal property is sold as a single product. Sales price does not include discounts or coupons (unless reimbursed by a third party), interest or financing charges from credit extended on a sale, or taxes legally imposed directly on the consumer if the charges are separately stated on the customer s invoice. Credits allowed against the sales price for tangible personal property taken in trade for resale remain exempt from sales tax. However, delivery and installation charges on sales of taxable items become taxable. Delivery charges are defined as charges by the seller for preparation and delivery to a location designated by the purchaser of personal property or services, including, but not limited to, transportation, shipping, postage, handling, crating, and packing. CLOTHING Clothing remains exempt from sales tax. The law defines clothing to mean all human wearing apparel suitable for general use. Definitions and examples are provided for items that are exempt and items that are taxable as clothing accessories or equipment, sports or recreational clothing and equipment, and protective clothing and equipment. The taxable status changes for a few items as a result of the new definitions. For example, sports uniforms are now taxable, but will be exempt. Ballet and tap shoes, clean room apparel and disposable clothing, hair bows, hard hats, liners and helmets, and rubber, vinyl and latex gloves will become taxable. Although the definition of clothing does not include sewing materials, a new exemption was added so that fabric, zippers, thread and other items that become a part of clothing remain exempt from sales tax. The Clothing and Wearing Apparel Sales Tax Fact Sheet will be revised to reflect the changes. FUR CLOTHING. Clothing made of fur will no longer be subject to sales tax beginning January 1, However a new gross receipts tax is imposed on retailers of fur. The tax is 6.5 percent of the gross revenues from the sale of clothing made from fur. The furrier (retailer) will make quarterly estimated payments of the tax and will file an annual return with the Special Taxes Division of the Department of Revenue. For more information on reporting this tax call the Special Taxes Division at or FOOD Charges for prepared food, soft drinks, alcoholic beverages, candy, dietary supplements, and food sold through vending machines and honor boxes remain taxable. Sales of food and food ingredients remain exempt. However, the new definitions given below result in changes in the taxable status of some products. For example, bakery products prepared by the retailer will be taxable regardless of the size or quantity of the item sold. Gum, baking chips and candied or dried fruit will be taxable as candy, but Twix Bars and Kit Kats will be exempt since they contain flour. Bottled water, regardless of container size will be exempt, but fruit juices containing less that 50 percent fruit juice will be taxable. The Food Products, Candy, and Beverages and the Restaurants and Bars Sales Tax Fact Sheets will be updated to reflect the changes resulting from the new definitions. Note: Brand names are used for illustration purposes only and do not imply sole representation in any category. Prepared food means food that is sold heated, two or more food ingredients mixed or combined by the seller for sale as a single item, or food sold with eating utensils provided by the seller such as plates, forks, cups, napkins, or straws. Prepared food does not include food that is only sliced, repackaged, or pasteurized by the seller. Soft drinks means nonalcoholic beverages that contain natural or artificial sweeteners. Soft drinks does not include beverages that contain milk or milk products, soy, rice, or similar milk substitutes, or greater than 50 percent vegetable or fruit juice by volume. 4

5 Candy means a preparation of sugar, honey, or other natural or artificial sweeteners in combination with chocolate, fruits, nuts, or other ingredients or flavorings in the form of bars, drops, or pieces. Candy does not include any item containing flour and must require no refrigeration. Food and food ingredients are exempt from sales tax. Food and food ingredients means substances, whether in liquid, concentrated, solid, frozen, dried, or dehydrated form, that are sold for ingestion or chewing by humans and are consumed for their taste or nutritional value. Food and food ingredients do not include candy, soft drinks, food sold through vending machines, and prepared foods. Food and food ingredients do not include alcoholic beverages, dietary supplements, and tobacco. SOURCING RULES The sourcing rules are criteria for determining which of the jurisdictions involved in a sale may impose sales or use tax on a sale. These rules only apply to the seller s obligation to pay or collect and remit sales or use tax with respect to the sale of a product. The provisions do not affect the obligation of the purchaser to remit tax on the use of the product or service. The sourcing rules are: 1. When the customer picks up the product or service at the seller s location, the seller will charge the sales tax that applies in their taxing jurisdiction. 2. When the seller ships the product or service to a location, at the direction of the customer, sales tax applies based on the sales tax imposed in the taxing jurisdiction where the product is delivered. 3. If neither 1 nor 2 applies, the seller will charge sales tax based on the address they have in their records for the customer. 4. If none of the above applies, the seller will charge sales tax based on the customer s address obtained during the sale transaction such as the address on the customer s check. 5. If none of the above applies and the seller does not have any address for the customer, the seller will charge sales tax based on the address the item was shipped from or the location where the service was provided. The rules include criteria for sales of services that the customer will use simultaneously in multiple locations. If a taxable service will be used in more than one taxing jurisdiction, the customer may purchase the service exempt using an exemption certificate. The purchaser is then responsible for reporting tax to the appropriate taxing jurisdiction. EXEMPTION CERTIFICATES Beginning January 1, 2002, a fully completed exemption certificate taken from the purchaser at the time of sale conclusively relieves the retailer from collecting and remitting Minnesota sales tax. Under current law, the retailer can be held responsible for sales tax unless the exemption certificate is taken in good faith from the purchaser. SPECIAL TAX RATES REPEALED The 6.2 percent motor vehicle rental tax and the additional 2.5 percent sales tax on liquor sales will be repealed effective December 31, The Commissioner of Revenue, in consultation with interested parties from industry, is required to submit a plan to the legislature by January 1, 2003 for a new tax to replace the revenues currently raised by the existing higher sales tax on liquor and the motor vehicle rental tax. LOCAL TAXES One of the conforming features of the agreement is that all local taxes must have the same tax base as the state sales tax and they must be administered at the state level by January 1, Beginning January 1, 2003, the Duluth local city tax will be administered by the Minnesota Department of Revenue. Duluth is currently the only general sales tax imposed by a local government that is not collected by the Department. EXEMPTIONS continued from page 3 FUNDRAISING SALES FOR NONPROFITS. A new exemption is provided for sales of tangible personal property by any person or business provided the entire proceeds, less the necessary expenses for obtaining the property, sold will be contributed to a registered combined charitable organization described in Minnesota Statutes section The charitable organization must first give written permission to the seller for the sale and must use the proceeds exclusively for charitable, religious, or educational purposes. This exemption does not apply to sales that occur over a period of more than 24 days per year. Effective August 1, NONPROFIT LIMITED LIABILITY COMPANIES. Single member limited liability companies qualify for sales tax exemptions allowed for nonprofit organizations, provided the single member of the LLC would qualify for the exemption. For example, if Nonprofit A, that qualifies as an exempt nonprofit organization for sales tax purposes, creates a single member LLC, the LLC would qualify for the same exemptions from sales tax as Nonprofit A. This is effective August 1,

6 CONSTRUCTION PROJECTS Several new construction project exemptions allow the project owner and the contractor to purchase materials and supplies exempt from sales tax at the time of purchase. The department will issue an exemption letter to the project owner for each of the following projects. The project owner may provide copies of the letter to suppliers and to contractors to provide to their suppliers in order to claim exemption from sales tax on qualifying purchases. To obtain an exemption letter, the project owner should send a written request to the Corporate and Sales Tax Division, Policy Services & Taxpayer Programs, Mail Station 6330, St. Paul, MN Soybean oilseed processing facility. An exemption is provided for materials and supplies used or consumed in, and machinery and equipment incorporated into the construction, improvement, or expansion of a soybean oilseed processing facility that: - is owned and operated by a cooperative organized under chapter 308A; and - is located in a county that has a population of less than 21,000 people. Effective for sales and purchases made between August 1, 2001 and June 30, Poultry litter biomass generation facility. An exemption is provided for materials and supplies used or consumed in and equipment incorporated into the construction, improvement, or expansion of a facility using biomass to generate electricity if: - the facility is designed to use poultry litter biomass or other biomass described in Minnesota Statutes section 216B.2424 as a primary fuel source; and - the facility generates power that will be sold under a contract approved by the public utilities commission under Minnesota Statutes section 216B Effective for sales and purchases made between July 1, 2001 and December 31, Waste tires cogeneration electrical generating facility. An exemption is provided for materials and supplies used or consumed in, and equipment incorporated into the construction, improvement, or expansion of a facility that uses waste tires to generate electricity if the facility: - uses waste tires as the primary fuel, - is a cogeneration facility; and - the installed capacity of the facility is one to 25 megawatts. Effective for sales and purchases made between July 1, 2001 and December 31, Biomass electrical generating facility. The exemption for building materials and equipment for an electrical generating facility that uses wood waste and by-products as fuel for generating electricity is extended to sales and purchases made between July 1, 2001 and June 30, This exemption was scheduled to expire July 1, LOW INCOME HOUSING PROJECTS Beginning August 1, 2001 an exemption is provided for materials and supplies used or consumed in, and equipment incorporated into the construction, improvement, or expansion of qualified low-income housing projects. To qualify, both the housing project and the owner must meet specific guidelines provided by statute. This exemption applies to purchases by the facility owner or by contractors for use on qualifying projects. For details on qualifications for the exemption, please call our office. To claim exemption the purchaser must provide a completed copy of the Certificate of Exemption, Form ST-3, to the supplier. Write Other in the exemption code box and indicate that the items purchased qualify for the low income housing exemption in the space provided under Describe the merchandise for which you are claiming exemption. The certificate will be updated in the near future to include this exemption. YELLOW MEDICINE COUNTY LAW ENFORCEMENT AND FAMILY SERVICES CENTER An exemption is provided for materials and supplies used or consumed in, and fixtures, furnishings, and equipment incorporated into the construction, improvement or expansion of the Yellow Medicine County law enforcement and family services center. The tax must be paid at the time of purchase and Yellow Medicine County must apply for a refund using the Special Purchase Refund Claim, Form ST- 11p. Effective for sales and purchases made between July 1, 2000 and December 31, PORK AGRICULTURAL PROCESSING FACILITY The exemption for building materials and equipment for the Prairie Farmers Cooperative pork processing facility is extended to sales and purchases made between January 1, 2001 and December 30, The tax must be paid at the time of purchase and the owner must apply for a refund using the Special Purchase Refund Claim, Form ST-11p. This exemption had been scheduled to expire on December 31, EXEMPTIONS ENDED The exemptions for construction materials and equipment for the Duluth Convention Center and the RiverCentre in St. Paul are repealed effective for purchases made after June 30, The exemption for materials to construct buildings to house qualifying biosolids processing equipment expired June 30, The exemption for construction materials and equipment for the Minneapolis Convention Center is repealed effective for purchases made after June 30,

7 MINNESOTA BUSINESS TAX EDUCATION PROGRAM Location Topic Date Time Bemidji Basic Sales 10/23/01 9 am 12:30 pm 2001 FALL WORKSHOPS Location Topic Date Time Sioux Falls, SD MN/SD 11/8/ pm 4:30 pm Brooklyn Business Taxes 9/25/01 6 pm 9:30 pm Park Basic Sales 10/2/01 6 pm 9:30 pm Employment 10/9/01 6 pm 9:30 pm Duluth Business Taxes 9/25/01 9 am 12:30 pm Basic Sales 10/2/01 9 am 12:30 pm MN/WI 10/9/01 9 am 12:30 pm Employment 10/16/01 9 am 12:30 pm Eden Prairie Use tax 10/16/01 9 am 12:30 pm Capital Equip/ 10/23/01 Industrial Prod. Business Taxes 11/6/01 9 am 12:30 pm 9 am 12:30 pm Basic Sales 11/13/01 9 am 12:30 pm Employment 11/20/01 9 am 12:30 pm Fargo, ND MN/ND 10/18/01 9 am 12:30 pm Hudson, WI MN/WI 10/16/01 9 am 12:30 pm Mankato Business Taxes 10/2/01 9 am 12:30 pm Basic Sales 10/9/01 9 am 12:30 pm Employment 10/16/01 9 am 12:30 pm Maplewood Basic Sales 10/2/01 9 am 12:30 pm Marshall Basic Sales 11/6/01 9 am 12:30 pm Onalaska, WI MN/WI 10/23/01 9 am 12:30 pm Rochester Business Taxes 11/6/ am 12:30 pm Basic Sales 11/13/ am 12:30 pm Employment 11/20/ am 12:30 pm St. Cloud Business Taxes 10/11/ am 12:30 pm Basic Sales 10/18/ am 12:30 pm Employment 10/25/ am 12:30 pm Capital Equip/ 11/1/2001 Industrial Prod. 9 am 12:30 pm St. Paul Business Taxes 10/6/ am 12:30 pm Basic Sales & Use Tax 10/13/ am 12:30 pm Employment 10/20/ am 12:30 pm Sales Tax Ad Rule 10/27/ am 12:30 pm Use tax 11/3/ am 12:30 pm Watertown, MN/SD 10/30/ pm 4:30 pm SD Contractor Issues Fort Snelling Business Taxes 9/11/01 Employment 9/12/01 Taxes S-corporations, 9/26/01 Passive Activity & At-Risk Rule Business Taxes 10/9/01 Employment 10/10/01 Taxes Business Fringe 10/24/01 Benefits 8:30 am noon Business 10/24/01 1 pm 4:30 pm Retirement Plans Business Taxes 11/13/01 Employment 11/14/01 Taxes Business Taxes 12/11/01 Employment 12/12/01 Taxes PLEASE REGISTER IN ADVANCE FOR THESE FREE WORKSHOPS. Minnesota Business Tax Education Program or TTY: Minnesota Relay Service Fax: Occasionally we may cancel a workshop five days before the scheduled date if we do not have a minimum number of participants. We will notify you if you are registered. 7

8 MINNESOTA Department of Revenue Corporate and Sales Tax Division, St. Paul MN Minnesota Sales and Use Tax Law Changes PRSTD STD U.S. POSTAGE PAID ST. PAUL, MN PERMIT NO. 171 MOTOR VEHICLES NEW RESIDENT REGISTRATION A vehicle registered in Minnesota by a person who was a resident of another country at the time of purchase is exempt from sales tax on motor vehicles if the vehicle was registered in the person s name for at least 60 days prior to registration in Minnesota. This exemption is effective July 1, TRANSIT PROGRAM VEHICLES Purchases or leases of motor vehicles to provide transit services are exempt from sales tax and sales tax on motor vehicles beginning August 1, Vehicles used by public or private transit operations such as city or town buses, and vehicles used to provide special transportation services for the elderly, handicapped or disabled may also qualify. To qualify for the exemption, the provider must be receiving financial assistance or reimbursement under Minnesota Statutes section or , or operate under Minnesota Statutes section , , or MISCELLANEOUS LOCAL TAX CREDIT Beginning January 1, 2002, credit will be allowed for local sales taxes legally paid in any other state against use tax due to Minnesota. Currently credit is allowed for taxes paid in any other state and for local taxes paid in a state that is a member of the Multistate Tax Commission. The credit will be applied first against the use tax due to the state and then against any use tax due to a local taxing jurisdiction in Minnesota. MINNEAPOLIS LODGING TAX RATE The city of Minneapolis is authorized to increase their local lodging tax from two percent to three percent. This tax applies to charges at hotels or motels with more than 50 rooms within the city limits. Further information will be provided prior to implementation of this rate increase. SOLID WASTE MANAGEMENT USE TAX IMPOSED Waste generators and self-haulers are liable for use tax on taxable solid waste if the tax has not been imposed by the waste management service provider. This is effective for services received on or after August 1, For information about reporting solid waste management use tax contact Special Taxes, Environmental Unit at or BORDER CITY DEVELOPMENT ZONES Following the 1997 floods, the legislature authorized the cities of Breckenridge, Dilworth, East Grand Forks, Moorhead, and Ortonville to designate border city development zones. This year, the legislature has allocated an additional $1.5 million for border city enterprise zone credits and the city of Luverne is authorized to designate border city development zones. Businesses within these zones may qualify for an exemption from property tax, a corporate franchise tax credit or refund of sales tax paid on purchases of certain machinery and repair parts. To claim a credit or an exemption, a business must first apply to the city for a tax credit certificate. If a sales tax refund is authorized by the city, the business must send the tax credit certificate along with a Purchaser Sales Tax Refund Claim, ST-11PUR, to the Department of Revenue to obtain a refund.